Criminal Defence in Cases of Money Laundering
At Schlun & Elseven, our attorneys represent German and international clients in cases concerning German law. In money laundering cases, legitimate business people can get caught in the middle of the case as they may unknowingly be involved in the process. Suspicion of involvement can lead to investigations of the suspect. Sometimes, such investigations can overstep the mark and impact on an individual’s rights. This can occur especially in the case of house searches by the police.
Such cases can involve suspects who may not have had much contact with the criminal justice system. Again, individuals involved in the legal profession, in legitimate businesses and other private individuals can end up involved in such cases. They may not know what is involved in how the criminal justice system operates. Having a criminal law attorney in your corner ensures that you have professional assistance who is familiar with the law of criminal procedure in Germany. If you are informed of money laundering charges being made against you or of some involvement with such a case, make sure to contact our experienced criminal law attorneys.
What is Money Laundering?
Money laundering is the action of hiding money that has been made illegally by concealing it amidst legitimate business income. For example, when income that has arisen from criminal activity (such as drugs offences) can be concealed through the ownership of or investment in a legitimate business enterprise. It may be seen as an activity linked to major organised crime, but in reality many legitimate business people and private citizens can face issues in this field. Banks are expected to take action and make reports when there are transactions that can be deemed as suspicious. However, banks also do not want to cause undue disruption for prominent customers. Therefore, this can be a difficult balancing act and consulting with legal professionals in advance may be the preferred course of action before taking any major action.
How can Money Laundering be Proved?
It can be difficult to establish where money originated from and furthermore it can be challenging to show that the offender did commit a criminal offence. The act of money laundering is legislated for under § 261 German Criminal Code (StgB) and it outlines the following:
- The money in question must be the result of a criminal offence,
- It also must have been intentionally hidden, disguised, produced by the offender
- The offender is aware that the assets derive from criminal activity and acts with intent.
There are quite a number of aspects to prove to show that money laundering did in fact take place. However, as there are a range of offences, it can also be shown that the offender acted in a negligent manner in determining the origin of the money. Should the offender find themselves in a situation where it was possible to determine that the money originated from criminal activity but did not act they may be found liable. It is worth bearing in mind that money laundering offences involving negligence rather than intent will generally involve reduced sentencing.
What are the Sanctions for Money Laundering?
Should someone be found liable for money laundering they can be given a jail sentence or be fined. If company managers are found to have committed such an action in their role with their company they can also face disqualification from holding such a role for a period of time into the future. See our pages on white-collar and business crime in Germany and the obligations of managing directors for more information. Companies can also lose licences to work in certain industries should they be found to have committed money laundering offences as well as face financial penalties.
For serious money laundering offences jail sentences can last up to 10 years. Less serious offences range between three months and five years. Serious offences would involve the offender being a member of a criminal gang or the offender committing money laundering offences on a commercial scale. The company involved in money laundering can face major fines where it is found that they acted negligently in trying to prevent it.
For individuals who acted with gross negligence in failing to prevent or report money laundering they can face a two year prison sentence or a fine. An individual who reports the offence can be given a reduced sentence or a complete refrain from the imposition of such sanctions. However, this reporting cannot just concern providing the authorities with information they already have
What Organisations are Most at Risk for Money Laundering Offences?
It is expected that financial institutions and certain other businesses should have safeguards in place to prevent money laundering offences from taking place. Banks, for example, should make reports and examine suspicious transactions. Such suspicious transactions may involve transfers of large amounts of money into accounts. Other financial service providers are also expected to carry out similar checks.
Organisations and firms in the legal profession such as lawyers and notaries are obliged to ensure that they are not active in money laundering offences. Legal firms should be aware of what is involved in the Money Laundering Act and should act accordingly. Those in the legal area as well as those in tax must further sign up to anti-money-laundering requirements with professional organisations within the field. Breaching such self-regulatory requirements can lead to major consequences in terms of their professional future within the sector.
Where is Money in Germany Laundered?
In Germany, the real estate sector has been used quite extensively for money laundering. The sector has been linked with billions of euros worth of money laundering and links have been made with the Italian Mafia in this area. The new legislation in the field has been introduced with the aim of targeting money laundering in this field in particular. Whether the action taken will be successful remains to be seen.
Money is also laundered through a number of other areas in Germany. The automobile industry, art trading and gambling enterprises are also considered areas of particular interest when it comes to the topic of money laundering in Germany. Due to the strength of the economy, Germany has been seen as a good location in which to launder money and now the government want to take action. When a government decides to clamp down on an area in criminal law, it can lead to many legitimate and innocent business people and other private individuals getting caught in the middle.
What Should I do if I Suspect Money Laundering?
As a business owner make sure to keep your financial records up-to-date and take note of transactions in the business. Keep your business’ accounts in clear order. Complete due diligence requirements when it comes to working with clients and in terms of transactions made. Major transactions, especially ones without warning and from unusual sources or those with no financial justification, can be grounds to be suspicious.
Should you have suspicions concerning transactions it is advisable to contact a lawyer knowledgeable in the field of money laundering. Acting too rashly could result in the loss of a valued client, while not acting soon enough could result in reputational damage to a company. Ensuring that there are anti-money laundering compliance mechanisms in place in the company can be vital. Avail of legal assistance before making the decision to approach authorities if you are unsure.